EMI's £300m bid

Record label seeks cash injection

13 July 2009 - The chairman of struggling record company EMI is in talks with Citibank in an attempt to secure a £300 million cash injection.

Guy Hands, who runs private equity firm Terra Firma which bought EMI in 2007, has also proposed Citibank wipe £500 million from the company's debt of £2.5 billion.

Andrew Bryson, Business Correspondent for the BBC says this move could be a further sign the company's vision for EMI isn't following their original plan.

He told 6 Music: "This is the third time Terra Firma have looked to put more money into EMI.

"Hands said before that EMI's business model just wasn't sustainable. They have something like 14 000 artists worldwide, most of them were loss-making."

"They might have quite a few Michael Jackson songs he recorded before his death, that they might be releasing soon" - Andrew Bryson, BBC Business Unit

Coldplay and Lily Allen

He went on to explain why it was not all bad news adding: "It's had quite a good last year with releases from Coldplay and Lily Allen, profits are up.

"It's also suggested they might have quite a few Michael Jackson songs he recorded before his death, that they might be releasing soon."

Bryson went on to say that it's EMI's publishing business that could be the key to turning their fortunes around.

"It owns the rights to about 1 million songs, that includes artists like The Beatles," he said.

"These are very valuable assets and that business Terra Firma hopes will continue to be profitable, it made about 100 million earnings last year."

Warner Music merger?

He went onto detail some of the options that have been mentioned for the label's future, adding: "One that’s been talked about for a long time is a possible merger with Warner Music, but that would still be some way down the line."

Could there be a more radical business model around the corner for the company?

Bryson is not sure that record label executives would accept a similar proposition to the deal Universal signed with Virgin Media.

"It allows broadband customers access to all of Universal's music for a flat fee, around £10 or £15 a month," he said. 

"But, those sorts of revenues are very hard for old style record industry bosses to accept, when they are used to fans paying £15 for a single album."

Victoria Hannaford